Case Analysis: The Fraser Inn
According to Brian Anderson, it will be easier to determine all that is needed for the business once it is up and running. While that may be acceptable for small, home-based, inexpensive business ventures, it may not be the best approach for a large-scale operation such as The Fraser Inn. One has to question whether a "seat of the pants" approach is the right one when creating a type of business that is beyond the scope of what has been done by any of the principals in the past (Fullen, 2004).
The Andersons are still very young, and they not only lack experience, but they also lack a deeper understanding of all that may be required for the successful operation of their new venture. The fact that they were successful with the All Ours Diner in the past is admirable, but the 20 short months that they operated that business does not really provide enough information as to whether they would be successful in the long-term with something much larger and more complex.
The planning of The Fraser Inn is a concern for the Andersons. They purchased the property at a good price, and they completed many renovations. However, it does not appear that they considered how much more they would have to spend (or borrow) in order to complete the renovations and purchase everything they needed to get the facility up and running. There was also no mention of licensing, and there did not seem to be a concrete plan regarding how many people they would need to hire or how much they would pay them (Nelson, 2007). Securing a chef was one of their main worries, and they only had a month to do that.
They had no definition opening date, and no specifics about how...
There was no advertising budget, really, and the Andersons resisted getting any kind of outside help with their venture. However, that help may be something very worthwhile for them, because everything that has been read about the case indicates that the Andersons are hard workers with many good ideas - and that they are in way over their heads. They may not completely realize that yet, but they are denying the seriousness of their lack of planning.
The staffing is another major concern that the Andersons have appeared to overlook. In their quest to purchase the property and do the renovations, they have failed to consider how much it will cost them to pay their staff. Those payments must be made even if they do not make any profit at all (Fullen, 2004). As long as the people they have hired are on the clock, they must be paid for those hours - regardless of the level of income that the Andersons or their venture is seeing. They do not want to hire people and then just have to lay them off or inform them that they do not have any hours for them to work, either, so they have to be careful about how many people they hire and whether those people will actually be needed in the future.
With three separate areas in The Fraser Inn, the staffing needs are going to be varied. This is something that the Andersons do not seem to have considered properly. Seeing as they do not even have a head chef yet, and they are unsure as to how many people they will need for their staff, it seems unlikely that they will be able to open their restaurant/entertainment facility as planned. When this is coupled with the lack of planning and lack of advertising, it is very difficult to determine how the Andersons will be able to even think through how many people they will need on staff. They will not want to pay a large number of people to stand around and wait for customers, but they will not want to be short-staffed because that can upset customers who may not come back. The section of The Fraser Inn that is reservation-only will be easier when it comes to determining staffing requirements, but a lack of knowledge about staffing could still cause…
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